Do Creditor Rights Influence the Use of Relationship Lending?
64 Pages Posted: 5 Feb 2018 Last revised: 1 Apr 2018
Date Written: April 1, 2018
Do creditor rights influence the use of relationship lending? With data from EFIGE, gathered during a 2010 survey spanning seven European countries, this article addresses this question. First, it determines that banks and firms are more willing to implement relationship lending technology in weak legal environments. Second, to explain these results, the authors demonstrate that relationship lending technology can complement poor creditor rights and, by doing so, assure contract completion between creditors and debtors. These results are robust across several tests
Keywords: Legal Environment, Creditor Rights, Relationship Lending, European countries
JEL Classification: G21, N20, L14
Suggested Citation: Suggested Citation